DP World's Dubai ports hit by Iran woes, rivalry

Dubai

DP WORLD Plc handled smaller cargo volumes at its home ports in Dubai for the fifth consecutive quarter, with US sanctions against Iran and competition from neighbouring Abu Dhabi contributing to the latest year-on-year decline, according to industry consultant Drewry.

The recent surge in tensions over shipping incidents in the Persian Gulf region, however, had little if any impact on the company's second- quarter throughput, said Neil Davidson, senior analyst for ports and terminals at London-based Drewry.

DP World, which operates ports from Vancouver to Hong Kong, runs terminals at Jebel Ali and Port Rashid in Dubai in the United Arab Emirates (UAE).

US President Donald Trump's tightening of sanctions on Iran in November was a "significant factor" behind the company's declining cargo volumes at the two Dubai ports, Mr Davidson said.

In addition, Jebel Ali faces tough competition from inside the UAE. Khalifa Port in the neighbouring emirate of Abu Dhabi has joint-venture agreements with Hong Kong-based Cosco Shipping Ports and MSC Mediterranean Shipping Co, and these deals have diverted a lot of container traffic away from Jebel Ali, Mr Davidson added.

The expansion of Khalifa Port is likely to continue to erode Jebel Ali's market share, he said. Abu Dhabi Ports chief executive officer Mohamed Al Shamsi said in December that Khalifa Port's capacity will double in 2019.

The embargo of Qatar continues to have an effect as well, he said. The UAE and several other Gulf Arab nations severed ties with Qatar in June 2017. BLOOMBERG